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LightSquared's lenders are up in arms over the bankrupt company's proposal for a format to sell off its prized cache of wireless spectrum, saying the move could block DISH Network's offer to buy the assets for $2.22 billion. The creditors object to LightSquared's plan to let Harbinger Capital Partners -- the hedge fund that runs the company -- sit on a committee that would decide its fate. They want an independent panel to decide how to distribute the assets, arguing that Harbinger does not want to auction them off.

Related Summaries

LightSquared would pay off DISH Network Chairman Charlie Ergen and other investors and return Philip Falcone's Harbinger Capital Partners to the fold in the restructuring plan the company filed Thursday in U.S. Bankruptcy Court as part of its quest to build a national wireless network. The deal would deprive Harbinger of a seat on LightSquared's board of directors.

Centerbridge Partners, a private-equity firm, will reportedly join with Harbinger Capital Partners and other investors to take LightSquared out of bankruptcy for $3.3 billion, which outbids DISH Network's agreement to pay $2.2 billion for the wireless assets. The deal would still need the Federal Communications Commission's blessing for LightSquared to build a national wireless network. An auction of LightSquared's assets, scheduled for Wednesday, was canceled.

LightSquared's creditors will get to decide from among four proposed breakup plans once their disclosure statements are formally submitted, a U.S. Bankruptcy Court judge ruled Wednesday. The plans, which will voted on by Dec. 5, include a $2.2 billion reserve bid from a group linked to DISH Network as well as proposals from LightSquared, Harbinger Capital Fund and a group of lenders. "All parties have consensually agreed to resolve their formal and informal objections to each others' disclosure statements," said LightSquared attorney Matthew Barr.

LightSquared's story might be approaching an endgame after a U.S. bankruptcy court judge on Monday ordered that the company's assets -- including its valuable trove of wireless spectrum licenses -- be auctioned off Nov. 25, which would end its dream of becoming a national wireless service provider. DISH Network may turn out to be the big winner: L-Band Acquisition, a company linked to DISH, has bid $2.2 billion for LightSquared, which was backed by Philip Falcone's hedge fund. DISH wants to combine LightSquared's spectrum with its own to start its own terrestrial service.

Centro Properties Group reached an agreement in principle with its banks to a two-year extension of its more than $5 billion of debt. Had Centro failed to reach a deal, it likely would have fallen into receivership.